Global Markets Soar As US Government Set To Reopen After Democrats Cave

Global Markets Soar As US Government Set To Reopen After Democrats Cave

Last week, around the peak of the repo crisis we said that while the Treasury was soaking up most market liquidity via its Treasury General Account (which had ballooned to over $1TN), any sign of a govt reopening would send risk assets sharply higher (as this liquidity would then flood back into the market), and sure enough, futures are surging this morning as it now appear that the US government shutdown is finally over after Democrats folded on Sunday night and agreed to reopen the govt with no victory in hand, having kept the government shut for almost 40 days, a record, for no reason at all. As of 9:00am S&P 500 futures were up 0.9%, after the index closed just above its 50-day moving average on Friday — sharply bouncing back after a dip below the threshold; Nasdaq 100 futures jump 1.4% on optimism that the government shutdown may end soon, along with easing US-China tensions and Trump’s bid to appeal to cash-strapped Americans with a tariff “dividend.” European and Asian stocks are also sharply higher. Premarket, Mag7 and Semis are the notable outperformers with AMD, AVGO, GOOG, META, MU, NVDA all up at 2% – 3.5% pre-mkt. Cyclicals are also seeing a pre-mkt bid while parts of Defensives are in the red. Bond yields are +3-4bp with USD flat. In commodities, the story is the strength in Ags and Precious Metals with the former seeing +1% move across much of the Ag complex and gold and silver up 2% and 3.3%, respectively, outpacing Base Metals which are also bid up. With the gov’t reopening, the market appear to be shifting its view back to fundamentals which remain strong for earnings and macro, but likely not enough for the Fed to pause/skip in December, which should benefit risk-assets.

In premarket trading, all Mag 7 stocks are higher (Nvidia +3.1%, Tesla +2.1%, Alphabet +2%, Meta Platforms +1.4%, Amazon +1%, Microsoft +0.8%, Apple +0.5%).

• Cryptocurrency-linked stocks are rallying amid risk-on sentiment as lawmakers move closer to a deal to end the longest shutdown in US history.
• Health insurers, including Centene (CNC), are falling as lawmakers move closer to ending the shutdown without securing a health care win.
• Gold stocks such as Newmont (NEM) are outperforming as the precious metal rises for a second day, with a weakening US economy increasing the chance of a rate cut next month and outweighing progress on ending the government shutdown in Washington.
• Celestica Inc. (CLS) shares are up 6% after Citi upgraded the electronic components company to buy from neutral.
• Grab Holdings Ltd. (GRAB) gains 6% after an Indonesian government official said the Southeast Asian nation’s sovereign wealth fund is set to be involved in a plan to combine GoTo Gojek Tokopedia’s parent with Grab.
• Metsera Inc. (MTSR) shares tumble 14% after Novo Nordisk A/S declined to further raise its offer for the US maker of an experimental weight-loss drug, bringing a bidding war with Pfizer Inc. to an end.
• Monday.com (MNDY) sinks 16% after the software company narrowed its full-year revenue forecast. It also reported its third-quarter results.
• Sunrun Inc. shares are up 6% in after Guggenheim upgraded the solar energy company to buy from neutral.
• TreeHouse Foods (THS) soars 20% after European buyout firm Investindustrial has agreed to buy the private-label food manufacturer.

In corporate news, Pfizer agreed to buy Metsera for up to $10 billion, prevailing over Novo Nordisk in a bidding war. Visa and Mastercard are said to be close to a new agreement to settle a two-decade legal spat with merchants. UPS and FedEx have grounded their McDonnell Douglas MD-11 aircraft fleet on Boeing’s recommendation after a crash in Louisville. 

In AI news, TSMC reported slowing growth in monthly revenue, highlighting uncertainty over the sustainability of the AI boom even as industry behemoths including Nvidia chase more chip orders. Robinhood plans to give amateur investors access to private AI companies whose valuations have increased significantly, CEO Vlad Tenev told the FT in an interview.

The risk-on mood spread across markets, lifting oil, metals and crypto. Europe’s Stoxx 600 was on track for its biggest gain since June. US Treasuries fell across the curve, pushing the 10-year yield up four basis points to 4.13%. Gold also advanced on prospects of a Federal Reserve rate cut next month. Bitcoin continued to move higher after flirting with the key $100k level early last week, while gold and oil rose. 

Monday’s optimistic tone offered relief after a volatile week, when worries over stretched valuations fueled a sharp selloff in the biggest winners of the artificial-intelligence boom. Ending the shutdown would give investors greater clarity on key economic data such as jobs and inflation, helping to lift the fog around the outlook for interest rates.  

The Senate voted 60-40 on a procedural measure to advance a bill to end the government shutdown, with a group of moderate Democrats breaking with their party leaders to support the deal. Assuming the government reopens in the coming weeks and statistics start moving again, Fed officials still face a data fog with information compiled via retroactive surveys and other methods — if the figures are published at all.

“Markets are taking very positively to the news of the potential resolution of the US shutdown,” said Marija Veitmane, head of equity research at State Street Global Markets. “We were very constructive on the market anyway and we saw last week’s selloff as a little bit of a buying opportunity.”

That said, how soon the shutdown will end remains uncertain. The Senate has yet to schedule a final vote, while the measure must also pass the House before reaching President Donald Trump for his signature. 

“It’s only the opening act in what could still be a drawn-out political drama, but investors are seizing on any sign of progress,” said Ipek Ozkardeskaya, a senior analyst at Swissquote. “They need to understand where the US economy stands, where inflation and jobs are headed and what the Fed should do next.”

As usually happens, we are now about to see a short squeeze, as discretionary and systematic investors cut exposure last week as simple momentum chasing strategies continued to stumble, according to Deutsche Bank strategists, aggregate equity positioning remains modestly overweight. A slowdown in tech and AI would be far more damaging to the US and emerging markets than to other developed regions. Since early 2024, tech and AI’s weight has risen from 39% to 50% in the US.

Elsewhere, Bessent said Trump’s suggestion, in a Sunday social media post, that Americans may receive a tariff “dividend” of at least $2,000 could come via the tax cuts passed in his signature economic policy bill earlier this year. US and China suspended port fees on each other’s ships for one year and paused probes into maritime practices. 

Third-quarter earnings are just about over, and the conclusion is corporate America is performing very well as earnings rise at the fastest pace in four years. Companies in the S&P 500 Index that have reported earnings for the third quarter — about 80% of the index by market cap — have grown the bottom line by 14.6%, effectively doubling what analysts were expecting. Looking ahead, strategists are bullish on the outlook.  Strategists at UBS Group AG expect the S&P 500 to climb to 7,500 next year on the back of solid earnings growth, implying an 11% gain from current levels. Their peers at Morgan Stanley, meanwhile, see clear signs of a recovery in corporate profits.

In Europe, the Stoxx 600 rises 1.4% as hopes for a deal to end the US government shutdown boost risk sentiment. Diageo shares surge after the company names former Tesco boss Dave Lewis as CEO. The technology and mining sectors lead gains — with ASML up as much as 2.9% — while personal care products shares lag. Technology stocks led gains in Europe, as they did in Asia after Nvidia CEO Huang said he had asked TSMC for more chip supplies as AI demand remained strong. Here are some of the biggest movers on Monday: 

• Diageo shares rise as much as 7.9%, the most since November 2020, after the UK distiller named Lewis as CEO.
• Kingspan advances as much as 8% after the construction materials company gave commentary on next year that Morgan Stanley described as supportive. Growth optionality presents upside to medium-term estimates, the analyst says.
• Siemens Energy shares rises as much as 5.5% after Jefferies upgraded its rating to buy, saying the shares continue to look undervalued despite more than doubling since the start of the year. 
• IAG shares rise as much as 6.7%, recovering some post-earnings losses from Friday’s session. 
• Novo Nordisk shares rise as much as 3.8% after its withdrawal from a takeover battle for obesity drug developer Metsera prompted relief among some investors that it won’t be spending $10 billion on an unproven asset.
• Camurus shares jump as much as 13%, the most in more than five months, after it reported positive topline results from an early-stage obesity treatment study.
• JTC shares fall as much as 5% after Permira agreed to buy the corporate services firm for £2.3 billion.

Earlier, Asian stocks rose, supported by a rebound in technology shares following a selloff last week on concerns over lofty valuations. Hopes of a possible end to the longest US government shutdown also lifted sentiment.  The MSCI Asia Pacific Index rose as much as 1%, with Tencent, TSMC and SK Hynix among the top contributors to the advance. South Korea’s Kospi gauge led gains in the region after reports on a potential dividend tax cut and likely increase in domestic equity allocation by a pension fund boosted optimism. The MSCI Asia benchmark has climbed more than 25% in 2025 — on track to outperform the S&P 500 by the widest margin in 16 years. Shares in mainland China reversed earlier losses to close 0.4% higher after the world’s two largest economies suspended port fees on each other’s ships for one year and paused probes into maritime practices. Equities also rose in Hong Kong. Here Are the Most Notable Movers 

• Mercari shares jumped after first-quarter earnings beat analyst expectations on greater cost efficiencies. Omron shares declined after its earnings disappointed analysts.
• China suspends countermeasures for one year against five US units of Hanwha Ocean from Nov. 10, according to a statement from the Ministry of Commerce.
• GoTo Gojek Tokopedia shares surged to the highest level in three months, after an Indonesian government official said the Southeast Asian nation’s sovereign wealth fund, Danantara, is set to be involved in a plan to combine its parent with rival Grab Holdings Ltd.
• Transformers & Rectifiers India shares fall as much as 20%, the most since July 2023, after second-quarter profit and revenue missed analysts’ estimate.
• Subaru reported net income for the second quarter that beat the average analyst estimate.
• Nissin Foods cut its operating income guidance for the full year; the guidance missed the average analyst estimate.
• Trent shares fall as much as 6.5%, most in over four months, after moderation in second-quarter sales growth triggered brokerages to cut their earnings estimates. Citi downgraded its rating on the company to a sell after results published Friday.
• Yangzijiang Financial Holding shares fall as much as 61% in Singapore as they start to trade excluding their entitlement to the maritime investments business being spun off into Yangzijiang Maritime Development.
• Intensifying competition in India’s online grocery delivery space is weighing on the shares of market leader Eternal Ltd. and its listed rival Swiggy Ltd.
• Mercari shares rose as much as 15%, the most since Feb. 7, after the Tokyo-based online marketplace company reported 1Q earnings that beat analyst expectations on greater cost efficiencies.

In FX, the yen is the weakest of the G-10 currencies, falling 0.5% against the greenback and taking USD/JPY back above 154. The Norwegian krone is among the outperformers, rising 0.5% after CPI surprised to the upside.

In rates, Treasury fall as haven demand wanes, pushing US 10-year yield up 3 bps to 4.13%. German government bonds also edge lower.

hold modest losses in early US trading after gapping lower at the Asia open as signs lawmakers may end the government shutdown stoked risk appetite. US yields are 3bp to 4bp higher with curve spreads little changed; 10-year, higher by more than 3bp near 4.125%, is ~2bp cheaper vs bunds and gilts in the sector.  $58 billion 3-year note auction at 1pm New York time has WI yield near 3.60%, about 2bp cheaper than last month’s, which stopped through by 0.8b.  IG dollar issuance slate empty so far but expected to build ahead of the holiday Tuesday; around $40 billion of supply is projected this week, following a combined $136 billion over the past two weeks.

In commodities, Spot gold climbs $80 to ~$4,080/oz. WTI crude futures add 0.2% to around $60 a barrel. Bitcoin rises 1.5% to around $106,000.

The US economic calendar empty for the session. Fed speaker slate includes Daly (8:30am) and Musalem (9:45am)

Market Snapshot

• S&P 500 mini +1%
• Nasdaq 100 mini +1.5%
• Russell 2000 mini +1.2%
• Stoxx Europe 600 +1.4%
• DAX +1.8%
• CAC 40 +1.4%
• 10-year Treasury yield +3 basis points at 4.13%
• VIX -0.4 points at 18.7
• Bloomberg Dollar Index little changed at 1218.71
• euro little changed at $1.1568
• WTI crude +0.8% at $60.24/barrel

Top Overnight News

• A group of Democrats broke with their party and supported a deal to end the longest-ever US government shutdown. The Senate voted 60-40 on a procedural measure to advance the bill, though it has yet to schedule a vote for final passage. BBG
• Democratic lawmakers and liberal grassroots groups erupted Sunday night as moderate Senate Democrats moved to cut a deal with Republicans that would put an end to the government shutdown. Democrats are primarily frustrated that Affordable Care Act tax credits will not be extended. Axios
• More than 10,000 flights were delayed or canceled yesterday as a snow storm in Chicago compounded the effect of a third day of government-mandated restrictions. Transportation Secretary Sean Duffy told Fox that flights may “slow to a trickle” during Thanksgiving if the shutdown persists. BBG
• Scott Bessent suggested to ABC that Donald Trump’s proposed $2,000 tariff “dividend” may be referring to a decrease in taxes, but he hasn’t spoken about it with the president. BBG
• US President Trump called for Senate Republicans to send government money given to health insurance companies and send it directly to the people.
• Boeing spokesperson said they recommended to the three operators of the MD-11 freighter that they suspend flight operations, while UPS (UPS) and FedEx (FDX) spokespersons said they made the decision to immediately ground their MD-11 fleets following the Louisville crash.
• White House Economic Adviser Hassett said US GDP could be negative in Q4 if the government shutdown drags on.
• US Supreme Court allowed the Trump administration to withhold billions in funding for food aid for now. It was separately reported that the Trump admin ordered US states to stop paying full food aid benefits to low-income American families and said that they are "unauthorised".
• China added more than a dozen fentanyl precursors to a list of controlled exports to the US, Mexico and Canada, in an apparent move to implement commitments made in a trade deal reached between Xi Jinping and Donald Trump last month. BBG
• China has suspended retaliatory port fees on US-linked vessels for one year, following Washington’s pause of similar charges under its “Section 301” investigation targeting the Chinese maritime sector. SCMP
• The Bank of Japan’s policy board has signaled that the next interest-rate increase may be coming soon, according to its latest summary of opinions, with members keeping a particular eye on domestic wage trends. WSJ
• Japan’s new PM Sanae Takaichi said on Monday she would work on setting a new fiscal target extending through several years to allow more flexible spending, essentially watering down the country's commitment to fiscal consolidation. She also renewed calls for the Bank of Japan to go slow on interest rate hikes, despite signs that most central bank policymakers would prefer to see a resumption of monetary tightening sooner rather than later. RTRS
• The ECB’s Luis de Guindos said the current level of euro-zone borrowing costs is appropriate but officials must remain cautious. BBG
• Fed survey on Friday noted that policy uncertainty, including trade policy, central bank independence and availability of economic data, was the most frequently cited risk to US financial stability, while AI was added as a top stability concern, and respondents also cited geopolitical risks, inflation, monetary tightening, and higher long-term rates as top salient risks.
• Fed’s Williams (voter) said the gap between rich and poor risks a US downturn and suggested that poorer Americans’ mounting problems could be a factor in whether the central bank cuts rates in December, while he sees a balancing act for the December rate meeting, according to FT.
• NVIDIA CEO said they have very strong demand in Blackwell chips and asked TSMC (2330 TT) for more wafers to meet strong AI demand, while he stated that business is growing strongly and there will be a shortage of different things, as well as noted said Samsung, SK Hynix, and Micron have scaled up capacity.

Trade/Tariffs

• USTR announced the suspension of action in the Section 301 investigation of China's targeting of maritime logistics and shipbuilding sectors for dominance, with the action to be suspended for one year as of 00:01 EST on November 10th, while the USTR said the US will negotiate with China pursuant to Section 301 regarding the issues raised in the investigation.
• FBI Director Patel visited China last week to talk about fentanyl and law enforcement, according to sources cited by Reuters.
• China’s Commerce Ministry said it suspended the 2024 ban on approving exports to the US of dual-use items related to gallium, germanium, antimony, and superhard materials until 27th November 2026.
• China halted special port fees for US vessels for one year and removed sanctions on US-

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